Advice From/For Israel's War On Poverty

NATO AIR

Senior Member
Jun 25, 2004
4,275
285
48
USS Abraham Lincoln
let's hope Israel (and America) heeds his words....

http://www.jpost.com/servlet/Satell...cle/Printer&cid=1127874075120&p=1006953079865
A Third World Israel

Daniel Doron, THE JERUSALEM POST Sep. 28, 2005

Acting Finance Minister Ehud Olmert can win the war he declared on poverty by not repeating the past mistakes of pumping billions into our failed welfare system. He can win because government policies, which he can reverse, generate most poverty in Israel.

He can stop allowing local monopolies to plunder consumers, opening markets to price-reducing competition. He can reduce government-induced high housing costs and the high cost of education, health, infrastructure, electricity and water. He can make government operations a little more efficient, which will enable him to reduce taxes and increase workers' take-home pay by thousands of shekels.

Best of all for Olmert, such actions bear fruit quickly. They can earn him great public acclaim and clear him of the charge that despite his empathetic talk about poverty, he really always protects the interests of Israel's rapacious oligarchy.

If Olmert continues with failing distributive policies (the mandate he gave his anti-poverty commission is to shift more funds to existing welfare programs), it will be in part because he, like many other politicians, misreads the real needs of so many Israelis who cannot make ends meet. Most of our politicians heed the bad advice of the populist partisans of the extreme welfare state, the vociferous Social Lobby that arrogated to itself the exclusive right to "represent" the Israeli poor.

Since most of Israel's elites are educated in universities where crypto-Marxist dogmas rule, it is not surprising that the Social Lobby, which has promoted very destructive policies that cost billions and hurt the poor, is nevertheless promoted by many academics and their media friends, and that our politicians follow suit.

Two recent programs by prominent academics illustrate how they skew public perception and eventually policy formation.

Wealth redistributors (many of them affluent, or tenured, of course) seldom bother to think about what it takes to create wealth. To them, wealth – which in open democratic societies is created by hard-working individuals, benefiting from specific social conditions (laws, markets) – is merely "national income," a sanitized abstraction.

So they treat wealth as if it was manna falling from heaven, fortune's gift, a given. The only remaining problem, they think, is how to distribute income "equitably," without any regard to who created it and how. So they advocate polices that kill the goose laying the golden eggs which underwrite necessary welfare programs.

Two professors, Jonathan Wolf, a London University philosopher, and Avner de-Shalit, a political science professor at Hebrew University (an avid promoter of socialism), devote most of their forthcoming book Disadvantaged to defining who are the poor and how the state can be held responsible for their plight and for helping them overcome it.

They were commissioned by British Prime Minister Tony Blair, who is trying to pacify his party's left wing by being "social," as Israeli politicians are fond of doing.

This perhaps explains why he delegated this task to two professors who are apparently blind not only to economics but also to its political-science offshoots like the Theory of Social Choice. Otherwise how can one explain their approach to poverty as if it were a philosophical challenge of finding the right definition, rather than concrete and detailed analyses based on the fact that poverty derives from a variety of conditions, many of them cultural and many temporary.

But it is not only the abstract, reality-denying "philosophical" approach to poverty that mars the professors' analysis, but the shocking nonchalance with which they offer discredited failed "solutions." De-Shalit states:" We certainly recommend a better social democratic system where it will be more pleasant, and more moral, to live..." If this requires returning to the Israeli socialist system of 40 years ago, he explains, "than society must recognize this and go backwards, to what we had, or try something else."

Only by denying reality can Wolf and de-Shalit insist that governments, which generally impoverish people, are the ones who would care for the weaker strata "by necessarily practicing equality seeking policies."

Only by being blind to the terrible tragedy that Israel's distorted economic system, including its welfare system, has inflicted on the weakened strata, can they cavalierly recommend that we return to such an abysmal system or "try something else," but not, of course, the market economy, which has been proven as the most effective, albeit imperfect way, to eliminate poverty.

A childlike belief in an omnipotent and benevolent government and a blindness to the powers of markets marks even the work of many Israeli economists. Few of them ever demand the obvious, that government stop inhibiting competition and thus reduce prices and enhance the purchasing power of the poor. Instead they call for more government interference.

Thus Tel Aviv University economist Dan Ben-David, who is often solid in his criticism of our welfare system, does not seem to realize that its failures are not accidental but the inevitable outcome of political intervention in the economy. He absurdly suggests that we cure our maladies by having government "correct" what markets have failed to achieve.

One of his main recommendations is that government retrain workers, when its record in doing so has been a costly and unmitigated failure.

Those recommending further government intervention believe that they offer a "Third Way" between "unbridled" capitalism and socialism. They do not seem to notice that the only direction to which the Third Way leads is the Third World.

The writer is director of ICSEP, a free-market independent think tank. www.icsep.org.il.
 

New Topics

Forum List

Back
Top